How Sula Vineyards plans to dominate the premium wine category
Sula Vineyards MD and CEO Rajeev Samant told CNBC-TV18 why the company is more focussed on the premium category and what excites it about the wine tourism business.
Sula Vineyards, a leading Indian winery situated in Nashik, has set its sights on dominating the premium wine market. In a conversation with CNBC-TV18, Rajeev Samant, the Managing Director and CEO of Sula Vineyards, stated that "75% of the revenue now comes from the premium segment, which is expected to grow in double-digits."
Samant highlighted the company's increased focus on the above ₹700 category, which is 'vast and lucrative', given the intense competition and aggressive discounting at the lower end, especially from unbranded wines.
Sula raised prices recently and intends to implement a 3% annual price increase.
Samant said the wine tourism segment is 'a very exciting business for us', projecting revenues of nearly ₹95-100 crore for the year, including on-site wine sales.
In an earlier interview, Samant mentioned that the company is only working to enhance the visitor experience. They do not intend to venture into the traditional hospitality industry and compete with renowned brands like Taj, Oberoi, SaffronStays, or Lohono.
The occupancy rate at their resorts has consistently exceeded 80%, and during weekends, it frequently reaches full capacity.
The company adopts an asset-light model for their villa construction. It collaborates with business partners in Nashik who handle the capital expenditure and construction, while Sula manages operations and integrates their wine offerings into the experience.
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On November 9, Sula Vineyards reported an over 18% increase in net profit to ₹23.1 crore for the July-September quarter from ₹19.5 crore last year. The revenue from operations recorded a robust growth of over 11% to ₹142.8 crore, with significant contributions from Elite and Premium wines.
The wine tourism revenue grew 27% year-on-year (YoY) to ₹12.1 crore. The company's EBITDA (earnings before interest, tax, depreciation, and amortisation) rose 18% to ₹45.1 crore with margin jumping 173 basis points to 31.6%. One basis point is one-hundredth of a percentage point or 0.01%.
The company distributes wines under a bouquet of popular brands such as Sula, its flagship brand, besides other popular brands like RASA, Dindori, The Source, Satori, Madera & Dia.
The ₹4,083 crore market capitalisation company currently produces 56 different labels of wines across 13 distinct brands at four owned and two leased production facilities in Maharashtra and Karnataka.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
First Published: Nov 10, 2023 3:34 PM IST
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